Despite the excitement a potential merger of Sprint and T-Mobile created, over the weekend the two sides announced that they had failed to reach an agreement on terms and determined it would be best for each company to continue on their own, individual paths. The deal would have created a wireless carrier large enough to rival AT&T and Verizon, but at the expense of a market comprised of at least four major carriers.
According to a statement issued by T-Mobile CEO John Legere, one of the requirements for T-Mobile was that any deal “will have to result in superior long-term value for T-Mobile’s shareholders.” Meanwhile, Sprint CEO Marcelo Claure stated, “we have agreed that it is best to move forward on our own….As convergence in the connectivity marketplace continues, we believe significant opportunities exist to establish strong partnerships across multiple industries.” Both statements were simple, to the point, and avoided going into any details regarding issues that may have derailed the talks.
Sources behind the scenes indicate a few issues seem to have become a source of contention, notably for Sprint and Softbank. Primary among those was reluctance on the part of Softbank CEO Masayoshi Son to give up control of Sprint to T-Mobile and Deutsche Telekom. Sources also say T-Mobile’s valuation of Sprint was too low for Sprint’s liking despite several months of a falling stock price. Finally, sources say Son thinks Sprint is a vital asset for Softbank that can yield significant benefits for the company beyond what would have been gained in a merger with T-Mobile.